“Today, the global fossil fuel industry is subsidized to the tune of more than $5 trillion a year.”
It seems abundantly clear that something any man, woman or child with a reasonable understanding of the scientific method will agree on is that we need to stop burning fossil fuels if we are to avoid the breakdown of ecosystems and runaway global warming. If you aren’t convinced, maybe the CEO of the world’s second-largest publicly traded oil and gas producer, Royal Dutch Shell, can convince you. In 2020, Ben van Beurden said “The future of energy needs to evolve as something else, and we find a role for ourselves in it.” This is the same company that knew its product was causing the planet to warm, and yet for decades spent vast sums obfuscating the truth by funding myriad climate change denying think tanks and lobbying politicians across the globe. Ben van Beurden himself admitted his company’s guilt when he said, “Yeah, we knew. Everybody knew, and somehow we all ignored it.” It was only in 2019 that Shell finally opted to leave the American Fuel & Petrochemical Manufacturers lobbyist group, citing an incompatible position on climate change as their reason for exiting.
Why are we still funding our own extinction by subsidizing the very industries to blame for our predicament?
So, it is clear that we need to move away from burning any type of fossil fuel as a matter of urgency. Let’s try a little thought experiment. Imagine you are a world leader that deeply cares about your nation and its people, as we are all sure, our world leaders today do. It is your job therefore to transition your nation away from fossil fuels in a quick fashion in order to avoid planetary collapse. Which of these two courses of action would you take? A) Continue to subsidize fossil fuel companies in order to reduce the cost of their products and increase their consumption, or B) start to remove these subsidies in order to increase their cost and decrease their consumption while subsidizing the new energy sources that will replace oil, gas, and coal to make sure the population can afford them? You would think that most world leaders would opt for option B, knowing that this is the only way to reduce fossil fuel consumption However, this isn’t what is happening. Today, the global fossil fuel industry is subsidized to the tune of more than $5 trillion a year. Amazingly, at the high end, the annual investment needed to fulfill all the U.N. Sustainable Development Goals sits at exactly $5 trillion a year, less than the amount currently handed out to the industry that is causing the crisis and has lied to us for decades in order to keep our custom. Some will say that this view is simplistic, but the reality is very clear, we have to move away from fossil fuels as soon as possible. The way to do that is obviously not by making them cheap to use. If it sounds simplistic, it’s because it is a simple supply and demand theory. Increased price leads to decreased consumption and vice versa. Business 101. With this in mind, why are we still funding our own extinction by subsidizing the very industries to blame for our predicament? Could the answer be a simple case of “you scratch my back, I’ll scratch yours?”
In the 2020 election between Joe Biden and Donald J. Trump, the fossil fuel industry spent at least $359 million on federal campaign donations and lobbying. There is so much dark money entering the political sphere each year that the true amount is likely much more. Mr. Trump himself explained the system very well in his 2015 presidential campaign when he was questioned about his reasons for giving political donations to the Democrats. He answered:
“You better believe it… I will tell you that our system is broken. I gave to many people. Before this, before two months ago, I was a businessman. I give to everybody. When they call, I give. And you know what? When I need something from them, two years later, three years later, I call them. They are there for me. And that’s a broken system.”
So broken that in the 2016 election, Trump was handed just $361,000 by the mining industry for his political campaign and in return, the Obama era environmental regulations, intended to prevent discharge of toxic contaminants into river systems, were rolled back. The savings to the coal industry are estimated at $175 million. Money well spent and Trump, unsurprisingly comes cheap, as Mitt Romney was handed $1.5 million in the same campaign cycle. In 2020, Royal Dutch Shell contributed $5,550,000 to political lobbyists. It is unclear what they expected in return.
InsideClimate News estimated that Exxon and other oil companies had spent more than $5 billion to sow doubt amongst the population regarding the certainty of climate science and to fight clean energy policies. Almost a billion dollars was spent on campaign contributions between 2000-2016. In total, the fossil fuel industry outspent renewable energy by more than 13-1.
The right honorable Senator James Inhofe from Oklahoma, infamous for disproving climate science by brandishing a snowball on the Senate floor, received $2,239,385 from the interests he protects. These politicians, if nothing else, provide excellent Return on Investment (ROI). If you are wondering what fossil fuel interests get in exchange for these donations, you can probably guess. In the 113th Congress (2013-2014), the fossil fuel industry spent $350,587,282 on lobbying and campaign contributions. In the same Congress, $41,840,275,998 surged in the other direction in the form of federal production and exploration subsidies. This represents an 11,900% ROI. For every $1 spent by the industry, $119 in subsidies find their way back into the coffers of the industry. Can you imagine a better business model?
Civil disobedience is a far better plan than funding our own extinction.
The situation is similar in Australia which is the largest exporter of coal on planet Earth. Here, the company Mineralogy gave more than $83 million to the United Australia Party in 2019 to prevent Labor from winning the election. This was the largest ever political donation in Australia and it was given by Clive Palmer, a climate skeptic, whose company is pushing to open gigantic coal mine operations in Queensland’s Galilee Basin. Mr. Palmer was not alone as $867,000 flowed from mining and energy companies to political parties across the spectrum. Due to poor restrictions on dark money, it is estimated the actual figure could be five to ten times higher. In return for campaign financing, the Australian taxpayer lavishes billions on the industry in tax-based subsidies, direct contributions, loans, project approvals, and lax environmental laws.
Research from Greenpeace U.K. identified the leading Conservative party was handed one million pounds of fossil fuel money in 2019 and the Liberal Democrats also received two large donations from the industry. Again, it was unclear what the industry expects in return, but the U.K. treasury has given the oil industry tax breaks worth £2.3 billion and energy subsidies of £12 billion. This might have something to do with it.
Globally, it was found the richest twenty nations had promised more than $150 billion in investment towards the number one cause of the climate crisis, the fossil fuel industry, in the first six months of 2020 alone. The G20 represents 80% of global emissions and this money makes a mockery of any plans for a green recovery from the ravages of the Covid-19 pandemic.
While the rest of us understand supply and demand theory, our politicians, slick from all that oil money gushing into their hands, seem unable to firmly grasp this basic theory that is taught in all high school economics classes. Isn’t it about time we re-educated them? Civil disobedience is a far better plan than funding our own extinction.